This application relates generally to medical spending accounts. More specifically, this application relates to the use of centralized repositories in managing insurance information used to support reporting requirements associated with medical spending accounts.
There are currently a variety of different types of medical spending accounts. These different accounts are managed in different ways and are generally used for different purposes, but have as a common factor that they permit funds earned through employment to be applied on with certain income-tax advantages to pay for certain medical expenses. “Medical” expenses include expenses that arise in the diagnosis or treatment of conditions in the human body, including teeth or other oral structures in the form of dental expenses and including the eye and other ophthalmic structures in the form of vision expenses. Medical expenses may include fees to be paid to physicians, dentists, optometrists, or other medical practitioners for their services directly, fees paid to laboratories who perform analyses of blood or other tissues or who operate diagnostic equipment like x-ray machines, magnetic-resonance-imaging machines, and the like.
Different types of medical spending accounts available for these types of uses in the United States currently include flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and health reimbursement accounts (“HRAs”), and other types of medical spending accounts may be developed in the future. FSAs are financial accounts that are established as part of employer-sponsored benefits plans. Employees are able to contribute a set annual amount to the accounts, usually as part of a regular salary deduction that is applied to each paycheck. The employee is then able to spend the funds from the accounts to pay for medical expenses. Often the annual amount can be spent before the employee has completed making the contributions, permitting payment for medical expenses effectively to be made on an interest-free credit basis. Because the contributions to the account are made as a salary reduction, they are not subject to income tax.
HSAs are financial accounts that are intended to provide for payment of unreimbursed medical expenses incurred by those who are self-employed or employed by small organizations (fewer than 50 employees). One qualification requirement for such accounts is that the employee be covered by a high-deductible insurance plan. Funds in the account can be used on a pre-income-tax basis to pay for certain medical-insurance premiums and can earn tax-deferred interest. Unlike with FSAs, the funds in HSAs are available to rolled over from year to year if they arc unused.
HRAs are financial accounts having funds that are set aside by employers to provide reimbursement for employees who incur medical expenses. Like HSAs, the funds in the account can be rolled over from year to year, but they differ from HSAs not only in the fact that it is the employer who funds them rather than the employee, but also in that they have no restrictions on the size of the company where they are offered. The tax advantage for such accounts is enjoyed by the employers, who qualify for preferential tax treatment in a manner similar to employers who fund insurance plans.
In addition to their individual features, each of these different kinds of accounts may also be used in combination with different insurers. This may occur as an employee incurs medical expenses, some of which are eligible for reimbursement by an insurer and others of which are paid from one of the different types of medical spending accounts. Employees of different organizations, even those who reside within a single household, may interact with different insurers. Even a single employee frequently interacts with different insurers, particularly for different types of treatments. While this versatility makes for a flexible environment in which different types of medical spending accounts and different insurers may be used to accommodate individual circumstances, it also creates an environment in which management of relevant information may be difficult. Different insurers have different ways and formats for reporting how they determined which expenses are eligible for reimbursement, different ways for questioning and/or appealing those decisions, and the like. And the reporting requirements to comply for the tax benefits of the different types of accounts with the Internal Revenue Service differ. This reporting is further complicated by the different reporting formats used by the insurers.
There is thus a general need in the art for improved mechanisms for organizing insurance and/or medical spending account information for use by employees, administrators, and others.